1997 (5) TMI 186

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..... y. Appellant claims to have 27 dealers of whom 3 were in Bangalore city itself. The dispute in the appeal relates to the period from July 1982 to October 1983. On 1-6-1987 officers of Preventive Wing visited the factory and found from the books that appellant had raised debit notes on the 3 local dealers and collected a sum of Rs. 26,12,621.00 as handling and service charges. This was verified from the debit note register also. On the basis of debit notes, it was inferred that appellant had suppressed that real value of plywood in the price lists and paid duty on the reduced value and recovered differential value in the guise of handling and service charges on debit notes. Accordingly, a show cause notice was issued referring to the above f .....

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..... ndling and service charges covered by the debit notes were really not for post manufacturing activities but represented part of the price of the plywood cleared from the factory. The show cause notice refers only to the records of the appellant which merely show collection of handling and service charges under debit notes and the statement recorded from the manager of the appellant. The statement does not indicate that any significant question regarding extra amount had been put to the manager. However, it is pointed out that in the impugned order the Collector referred to certain circumstances relied on by the Income Tax Officer in the assessment order passed against one of the three dealers of the appellant in order to disallow certain ex .....

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..... er. On the other hand, the appellant seeks to place reliance on affidavits of two dealers and letter of one dealer submitted before the Collector claiming that they have necessary infrastructure and that the payments were made in respect of the post clearance work, as indicated earlier. Collector took the view that the affidavits and the letters are not sufficient. However, the question of sufficiency of evidence on the part of the appellant will arise only when there are some materials in support of the case propounded in the show cause notice. In the absence of such materials the fact that the appellant did not or could not produce any materials other than the letter of the affidavits of the dealers, could not help the department. We are .....

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